EXHIBIT 1.2
K&S DRAFT: 7/23/97
CHS ELECTRONICS, INC.
12,000,000 SHARES
COMMON STOCK
SUBSCRIPTION AGREEMENT
, 1997
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXXXXX SECURITIES
X.X. XXXXXXXX & CO.
as Representatives of the several
International Managers listed on Schedule I
c/o Raymond Xxxxx & Associates, Inc.,
000 Xxxxxxxx Xxxxxxx
Xx. Xxxxxxxxxx, Xxxxxxx 00000
Dear Sirs:
Subject to the terms and conditions stated herein, CHS ELECTRONICS, INC., a
Florida corporation (the "Company") proposes to issue and sell (the
"International Offering") to the several Managers named in SCHEDULE I (the
"International Managers") an aggregate of 3,000,000 shares (the "International
Firm Shares") of the Company's authorized common stock, par value $.001 per
share ("Common Stock").
It is understood that the Company is concurrently entering into an
Underwriting Agreement, dated the date hereof (the "Underwriting Agreement"),
with Xxxxxxx Xxxxx & Associates, Inc. and the other underwriters named therein
(the "U.S. Underwriters") relating to the concurrent offering and sale of
9,000,000 shares of Common Stock (the "U.S. Firm Shares") in the United States
and Canada (the "U.S. Offering", and together with the International Offering,
the "Offering").
In addition, the Company proposes to issue and sell (i) to the U.S.
Underwriters, at the option of the U.S. Underwriters and subject to the terms
and conditions stated in the Underwriting Agreement, up to an aggregate of
1,350,000 additional shares of Common Stock (the "U.S. Optional Shares") and
(ii) to the International Managers, at the option of the International Managers
and subject to the terms and conditions stated herein, up to an aggregate of
450,000 additional shares of Common Stock (the "International Optional Shares").
The U.S. Firm Shares and the U.S. Optional Shares are hereinafter called
the "U.S. Shares"; the International Firm Shares and the International Optional
Shares are hereinafter called the
"International Shares"; the U.S. Firm Shares and the International Firm Shares
are hereinafter called the "Firm Shares"; the U.S. Optional Shares and the
International Optional Shares are hereinafter called the "Optional Shares"; and
the Firm Shares and the Optional Shares are hereinafter called the "Shares".
To provide for the coordination of their activities, the U.S. Underwriters
and the International Managers have entered into an Agreement Between U.S.
Underwriters and International Managers which permits them, among other things,
to sell the Shares to each other for purposes of resale.
1. REPRESENTATIONS AND WARRANTIES
(A) REPRESENTATIONS AND WARRANTIES OF THE COMPANY. The Company hereby
represents and warrants to, and agrees with, each of the International Managers
that:
(i) A registration statement on Form S-3 (File No. 333-29779) with
respect to the Shares, including prospectuses subject to completion
relating to the U.S. Shares and the International Shares,
respectively, has been filed by the Company with the Securities and
Exchange Commission (the "Commission") under the Securities Act of
1933, as amended (the "Act"), and one or more amendments to such
registration statement may have been so filed. After the execution of
this Agreement, the Company will file with the Commission either (A)
if such registration statement, as it may have been amended, has
become effective under the Act and information has been omitted
therefrom in accordance with Rule 430A under the Act, prospectuses
relating to the U.S. Shares and the International Shares in the form
most recently included in an amendment to such registration statement
(or, if no such amendment shall have been filed, in such registration
statement) with such changes or insertions as are required by Rule
430A or permitted by Rule 424(b) under the Act and as have been
provided to and approved by the International Managers, or (B) if such
registration statement, as it may have been amended, has not become
effective under the Act, an amendment to such registration statement,
including forms of prospectuses relating to the U.S. Shares and the
International Shares, a copy of which amendment has been provided to
and approved by the International Mangers prior to the execution of
this Agreement. In the case of (A) above, all of the Shares have been
duly registered under the Act. In the case of (B) above, all of the
Shares will be duly registered under the Act. As used in this
Agreement, the term "Registration Statement" means such registration
statement, including all information incorporated by reference
therein, as amended at the time when it was or is declared effective,
together with any registration statement filed by the Company pursuant
to Rule 462(b) of the Act, including all financial statement schedules
and exhibits thereto and including any information omitted therefrom
pursuant to Rule 430A under the Act and included in the Prospectuses
(as hereinafter defined); the term "U.S. Preliminary Prospectus" means
such prospectus relating to the U.S. Shares subject to completion,
including all information incorporated by reference therein, included
in such
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registration statement or any amendment or post-effective amendment
thereto (including the prospectus subject to completion, if any,
included in the Registration Statement); the term "International
Preliminary Prospectus" means such prospectus relating to the
International Shares subject to completion, including all information
incorporated by reference therein, included in such registration
statement or any amendment or post-effective amendment thereto
(including the prospectus subject to completion, if any, included in
the Registration Statement) (such prospectus included by filing the
U.S. Preliminary Prospectus, to which the International Prospectus is
identical except for those pages following the U.S. Preliminary
Prospectus separately captioned "Alternate Page for International
Prospectus"); the term "U.S. Prospectus" means the prospectus relating
to the U.S. Shares, including all information incorporated by
reference therein, first filed with the Commission pursuant to Rule
424(b) under the Act or, if no prospectus is required to be so filed,
such term means the prospectus relating to the U.S. Shares included in
the Registration Statement; and the term "International Prospectus"
means the prospectus relating to the International Shares, including
all information incorporated by reference therein, first filed with
the Commission pursuant to Rule 424(b) under the Act or, if no
prospectus is required to be so filed, such term means the prospectus
relating to the International Shares included in the Registration
Statement. The term "Preliminary Prospectuses" means the U.S.
Preliminary Prospectus and the International Preliminary Prospectus.
The term "Prospectuses" means the U.S. Prospectus and the
International Prospectus.
(ii) No order preventing or suspending the use of any Preliminary
Prospectus has been issued and no proceeding for that purpose has been
instituted or threatened by the Commission or the securities authority
of any state or other jurisdiction. If the Registration Statement has
become effective under the Act, no stop order suspending the
effectiveness of the Registration Statement or any part thereof has
been issued and no proceeding for that purpose has been instituted or,
to the knowledge of the Company, threatened or contemplated by the
Commission or the securities authority of any state or other
jurisdiction.
(iii) When any Preliminary Prospectus was filed with the
Commission, it (A) contained all statements required to be stated
therein in accordance with, and complied in all material respects with
the requirements of, the Act and the rules and regulations of the
Commission thereunder, and (B) did not include any untrue statement of
a material fact or omit to state any material fact necessary in order
to make the statements therein in the light of the circumstances under
which they were made, not misleading. When the Registration Statement
or any amendment thereto was or is declared effective, and at each
Time of Delivery (as hereinafter defined), it (C) contained or will
contain all statements required to be stated therein in accordance
with and complied or will comply in all material respects with the
requirements of, the Act and the rules and regulations of the
Commission thereunder, and (D) did not or will not include any untrue
statement of a material fact or omit to state any material
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fact required to be stated therein or necessary to make the statements
therein not misleading. When any Prospectus or any amendment or
supplement thereto is filed with the Commission pursuant to Rule
424(b) (or, if a Prospectus or such amendment or supplement is not
required to be so filed, when the Registration Statement or the
amendment thereto containing such amendment or supplement to a
Prospectus was or is declared effective) and at each Time of Delivery,
such Prospectus, as amended or supplemented at any such time, (E)
contained or will contain all statements required to be stated therein
in accordance with, and complied or will comply in all material
respects with the requirements of, the Act and the rules and
regulations of the Commission thereunder, and (F) did not or will not
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading. Items B, D and F of this paragraph (iii) do not apply to
statements or omissions made in any Preliminary Prospectus, the
Registration Statement or any amendment thereto or any Prospectus or
any amendment or supplement thereto in reliance upon and in conformity
with written information furnished to the Company by any of the U.S.
Underwriters or International Managers specifically for use therein,
it being understood that the only such information is that listed in
the second parenthetical statement in Section 8(b) hereof.
(iv) The descriptions in the Registration Statement and the
Prospectuses of statutes, legal and governmental proceedings and
contracts and other documents are accurate and fairly present the
information required to be shown; and there are no statutes or legal
or governmental proceedings required to be described in the
Registration Statement or the Prospectuses that are not described as
required and no contracts or documents of a character that are
required to be described in the Registration Statement or the
Prospectuses or to be filed as exhibits to the Registration Statement
that are not described and filed as required.
(v) The Company and each of its subsidiaries has been duly
incorporated or organized, as the case may be, is validly existing as
a corporation or other legal entity, is in good standing under the
laws of its jurisdiction of incorporation or organization (with
respect to subsidiaries, only to the extent that such concepts are
recognized in each such subsidiary's jurisdiction of organization) and
has full power and authority (corporate and other) to own or lease its
properties and conduct its business as described in the Prospectus.
The Company has full power and authority (corporate and other) to
enter into this Agreement and to perform its obligations hereunder.
The Company and each of its subsidiaries is duly qualified to transact
business as a foreign corporation or other legal entity and is in good
standing under the laws of each other jurisdiction in which it owns or
leases properties, or conducts any business, so as to require such
qualification (with respect to subsidiaries, only to the extent that
such concepts are recognized in such jurisdictions), except where the
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failure to so qualify would not have a material adverse effect on the
financial position, results of operations or business of the Company
(a "Material Adverse Effect").
(vi) The Company's authorized, issued and outstanding capital
stock is as set forth in the Prospectuses under the caption
"Capitalization." All of the issued shares of capital stock of the
Company and each of its subsidiaries which is a corporation and all of
the Company's ownership interests of every subsidiary which is not a
corporation have been duly authorized and validly issued, are fully
paid for and are not subject to any claim for payment by the issuing
corporation or other such entity. The Common Stock conforms to the
description of the Common Stock contained in the Prospectus. None of
the issued shares of capital stock of the Company and each of its
subsidiaries which is a corporation has been issued or is owned or
held in violation of any preemptive rights of shareholders and no
person or entity has any preemptive or other rights to subscribe for
any of the Shares.
(vii) The Company does not own, directly or indirectly, any
capital stock or other equity securities of any other corporation or
any ownership interest in any partnership, joint venture or other
entity or association other than those listed on the inside front
cover of the Prospectuses. The Company owns 100% of the issued and
outstanding capital stock of each of its subsidiaries listed on the
inside front cover of the Prospectuses, free from liens, encumbrances
and defects, except for the subsidiaries (A) organized under the laws
of England, Hungary and Uruguay, as to each of which it owns 99.2%,
51% and 50%, respectively, of the issued and outstanding capital stock
or other type of ownership interest, as the case may be, and (B)
organized under the laws of Belgium, France and Portugal as to each of
which it owns approximately 99.997% of the issued and outstanding
capital stock or other type of ownership interest, as the case may be.
(viii) Except as disclosed in the Prospectus, there are no
outstanding (A) securities or obligations of the Company convertible
into or exchangeable for any capital stock of the Company, (B)
warrants, rights or options to subscribe for or purchase from the
Company any such capital stock or any such convertible or exchangeable
securities or obligations, or (C) obligations of the Company to issue
any shares of capital stock, any such convertible or exchangeable
securities or obligations, or any such warrants, rights or options.
(ix) Since the date of the most recent audited financial
statements included or incorporated by reference in the Prospectus,
neither the Company nor any of its subsidiaries has sustained any
material loss or interference with its business from fire, explosion,
flood or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree,
otherwise than as disclosed in or contemplated by the Prospectus.
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(x) Since the respective dates as of which information is given in
the Registration Statement and the Prospectus, (A) the Company has not
incurred any liabilities or obligations, direct or contingent, or
entered into any transactions, not in the ordinary course of business,
that are material to the Company, (B) the Company has not purchased
any of its outstanding capital stock or declared, paid or otherwise
made any dividend or distribution of any kind on its capital stock,
(C) there has not been any change in the capital stock, or any
material increase or decrease in the long-term debt or short-term debt
of the Company, and (D) there has not been any material adverse
change, or any development involving a prospective material adverse
change, in or affecting the financial position, results of operations
or business of the Company, in each case other than as disclosed in or
contemplated by the Prospectus.
(xi) The Shares to be issued and sold by the Company have been
duly authorized and, when issued and delivered against payment
therefor as provided herein, will be validly issued and fully paid and
nonassessable and will conform to the description of the Common Stock
contained in the Prospectuses and the certificates evidencing the
Shares will comply with all applicable requirements of Florida law.
(xii) No person or entity has any right, not effectively satisfied
or waived, to require the Company to include any securities with the
Shares registered pursuant to the Registration Statement. No person or
entity has any right to require the Company to file a registration
statement under the Act with respect to any securities of the Company
owned or to be owned by such person. Except as described in the
Prospectus, no person or entity has any right to require the Company
to include such securities with securities to be registered pursuant
to any other registration statement filed by the Company under the
Act.
(xiii) All offers and sales of the Company's capital stock prior
to the date hereof were at all relevant times duly registered under
the Act or exempt from the registration requirements of the Act and
were duly registered or the subject of an available exemption from the
registration requirements of the applicable state securities or blue
sky laws, and the Company has taken all actions reasonably necessary
for it to assure that such exemptions from registration would continue
to be operative during all applicable periods of time required by law.
(xiv) The Company and each of its subsidiaries is not, nor with
the giving of notice or passage of time or both would be, in violation
of its Articles of Incorporation or other organizational document or
Bylaws or other self-regulatory rules or in default under any
indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or to which any of their respective properties
or assets is subject, which default would have a Material Adverse
Effect.
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(xv) The issue and sale of the Shares and the performance by the
Company of all obligations under this Agreement and the Underwriting
Agreement and the consummation of the transactions herein and therein
contemplated will not conflict with, or (with or without the giving of
notice or the passage of time or both) result in a breach or violation
of any of the terms or provisions of, or constitute a default under,
any indenture, mortgage, deed of trust, loan agreement, lease or other
agreement or instrument to which the Company or any of its
subsidiaries is a party or to which their respective properties or
assets are subject, nor will such action conflict with or violate any
provision of the Articles of Incorporation or Bylaws of the Company or
any statute, rule or regulation or any order, judgment or decree of
any court or governmental agency or body having jurisdiction over the
Company or its subsidiaries or any of their properties or assets.
(xvi) The Company and each of its subsidiaries has good title to
all personal property owned by it free and clear of all liens,
security interests, pledges, charges, encumbrances, mortgages and
defects, except such as are disclosed in the Prospectuses or such as
do not materially and adversely affect the value of such property and
do not interfere with the use or proposed to be made of such property
by the Company and its subsidiaries; and any real property or
buildings held under lease by the Company or its subsidiaries is held
under valid, subsisting and enforceable leases, with such exceptions
as are disclosed in the Prospectuses or are not material and do not
interfere with the use made or proposed to be made of such property
and buildings. The Company and its subsidiaries do not own any real
property, except as described in the Prospectus.
(xvii) No consent, approval, authorization, order or declaration
of or from, or registration, qualification or filing with, any court
or governmental agency or body is required for the sale of the Shares
of the consummation of the transactions contemplated by this
Agreement, except the registration of the Shares under the Act (which,
if the Registration Statement is not effective as of the time of
execution hereof, shall be obtained as provided in this Agreement) and
such as may be required under state securities or blue sky laws in
connection with the offer, sale and distribution of the Shares by the
U.S. Underwriters and the International Managers.
(xviii) Other than as disclosed in the Prospectus, there is no
litigation, arbitration, claim, proceeding (formal or informal) or
investigation pending or, to the knowledge of the Company, threatened
(or any basis therefor) in which the Company or any subsidiary is a
party or of which any of their properties or assets is the subject
which, if determined adversely to the Company or such subsidiary,
would individually or in the aggregate with all other such
arbitrations, claims, proceedings or investigations, have a Material
Adverse Effect or which are otherwise material in the context of the
Offering. The Company and its subsidiaries are not in violation of, or
in default with respect to, any statute, rule, regulation, order,
judgment or decree,
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except as described in the Prospectuses and except for such violations
and defaults as do not and will not individually or in the aggregate
have a Material Adverse Effect, and the Company is not required to
take any action in order to avoid any such violation or default.
(xix) Xxxxx Xxxxxxxx, LLP, which has audited the financial
statements of the Company for the fiscal years ended December 31,
1992, 1993, 1994, 1995 and 1996, and Xxxxx Xxxxxxxx, P.C. and Deloitte
& Touche, which have audited the financial statements of certain
subsidiaries of the Company are, and were at all times during the
periods covered by their reports included or incorporated by reference
in the Registration Statement and the Prospectuses, independent public
accountants as required by the Act and the rules and regulations of
the Commission thereunder.
(xx) The financial statements and schedules (including the related
notes) of the Company included or incorporated by reference in the
Registration Statement, any Prospectus or any Preliminary Prospectus
were prepared in accordance with generally accepted accounting
principles in the United States consistently applied (or, if not
consistently applied, as applied on the basis stated in such financial
statements and schedules of the related notes thereto) throughout the
periods involved and fairly present the financial position and results
of operations of the Company, at the dates and for the periods
presented. The selected financial data set forth under the caption
"Selected Consolidated Financial Data" in the Prospectuses fairly
present, on the basis stated in the Prospectus, the information
included therein. The assumptions used in preparing the pro forma
financial statements included or incorporated by reference in the
Registration Statement, any Preliminary Prospectus and any Prospectus
provide a reasonable basis for presenting the significant effects
directly attributable to the transactions or events described therein,
the related pro forma adjustments give appropriate effect to those
assumptions, and the pro forma columns therein reflect the proper
application of those adjustments to the corresponding historical
financial statement amounts.
(xxi) This Agreement and the Underwriting Agreement have been duly
authorized, executed and delivered by the Company.
(xxii) None of the Company or any of its subsidiaries, or to the
knowledge of the Company any of its officers, directors or Affiliates,
as the term is defined under the Act and the Rules and Regulations of
the Commission promulgated thereunder (the "Rules and Regulations")
has (A) taken, directly or indirectly, any action designed to cause or
result in, or that has constituted or might reasonably be expected to
constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Shares
or (B) since the filing of the Registration Statement (1) sold, bid
for, purchased or paid anyone any compensation
8
for soliciting purchases of, the Shares or (2) paid or agreed to pay
to any person any compensation for soliciting another to purchase any
other securities of the Company.
(xxiii) The Company has obtained for the benefit of the Company
and the U.S. Underwriters and International Mangers from each of its
directors, officers and certain other shareholders of the Company a
written agreement (a "Lockup Letter") that for 90 days from the date
of the Prospectuses, such persons or entities will not, without the
prior written consent of Xxxxxxx Xxxxx & Associates, Inc., pledge,
sell, contract to sell, grant any option for sale of, or otherwise
dispose of (or announce any offer, pledge, sale, grant of an option to
purchase or other disposition), directly or indirectly, any shares of
Common Stock or securities convertible into, or exercisable or
exchangeable for, share of Common Stock.
(xxiv) Neither the Company nor any of its subsidiaries, nor, to
the knowledge of the Company or any of its subsidiaries, any other
director, officer, agent, employee, Affiliate or other person
associated with or acting on behalf of the Company or any of its
subsidiaries has, directly or indirectly, used any corporate funds for
unlawful contributions, gifts, entertainment or other unlawful
expenses relating to political activity, or established or maintained
any unlawful or unrecorded funds in violation of Section 30A of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"); made
any unlawful payment to foreign or domestic government officials or
employees or to foreign or domestic political parties or campaigns
from corporate funds; violated any provision of the Foreign Corrupt
Practices Act of 1977, as amended; or made any bribe, rebate, payoff,
influence payment kickback or other payment unlawful under the laws of
the United States or any foreign jurisdiction.
(xxv) The Company and each of its subsidiaries are in compliance
with all material respects with foreign, federal, state, and local
laws, treaties, ordinances, rules, and regulations and Executive
Orders (collectively, "Laws"). The Company and each of its
subsidiaries have all licenses, permits and authorizations necessary
to operate under all Laws, and have not received notice of proceedings
relating to the revocation or modification of any such license, permit
or authorization, except where the failure to have such license,
permit or authorization would not (individually or in the aggregate
with respect to all such failures) have a Material Adverse Effect. The
Company and each of its subsidiaries are in compliance in all material
respects with all terms and conditions of such licenses, permits and
authorizations. Neither the Company nor any of its subsidiaries has
authorized, conducted or has knowledge of the generation,
transportation, storage, use, treatment, disposal or release of any
hazardous substance, hazardous waste, hazardous material constituents,
toxic substance, pollutant, contaminant, petroleum product, natural
gas, liquefied gas or synthetic gas defined or regulated under any
environmental law; and there is no pending or, to the knowledge of the
Company and each of its subsidiaries, threatened claim, litigation or
any administrative agency proceeding, nor has the Company or any
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of its subsidiaries received any written or oral notice from any
governmental entity or third party, that without limiting the
generality of the foregoing; (A) alleges a violation of any Laws by
the Company or any of its subsidiaries; (B) alleges that the Company
or any of its subsidiaries is a liable party under the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 U.S.C. ss.
9602 ET SEQ. or any state superfund law; (C) alleges possible
contamination of the environment by the Company or any of its
subsidiaries; or (D) alleges any violation of any export control Laws
or Executive Orders issued pursuant to such Laws by the Company or any
of its subsidiaries.
(xxvi) The Company owns or has the right to use all patents,
patent applications, trademarks, trademark applications, trade names,
service marks, copyrights, franchises, trade secrets, proprietary or
other confidential information and intangible properties and assets
(collectively, "Intellectual Property Rights") necessary to conduct
its business as presently conducted and as described in the
Prospectuses, and as the Prospectuses indicate the Company proposes to
conduct its business, except where the failure to own or have such
rights would not have a Material Adverse Effect; and to the knowledge
of the Company, the Company has not infringed and is not infringing,
and the Company has not received notice of infringement with respect
to, asserted Intellectual Property Rights of others and there is no
infringement by others of Intellectual Property Rights of the Company,
in either case which might result in a Material Adverse Effect.
(xxvii) The Company is insured by insurers of recognized financial
responsibility against such losses and risks and in such amounts as
management of the Company deems prudent and in the best interests of
the Company and its shareholders; and the Company has no reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a comparable cost, except as disclosed in the Prospectus.
(xxviii)The Company and each of its subsidiaries makes and keeps
accurate books and records reflecting its assets and maintains
internal accounting controls which provide reasonable assurance that
(A) transactions are executed in accordance with management's
authorization, (B) transactions are recorded as necessary to permit
preparation of the Company's financial statements in accordance with
generally accepted accounting principles and to maintain
accountability for the assets of the Company, (C) access to the assets
of the Company is permitted only in accordance with management's
authorization, and (D) the recorded accountability for assets of the
Company is compared with existing assets at reasonable intervals and
appropriate action is taken with respect to any differences.
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(xxix) The Company and each of its subsidiaries has filed all
foreign, federal, state and local tax returns that are required to be
filed by it and has paid all taxes shown as due on such returns as
well as all other taxes, assessments and governmental charges that are
due and payable; and no deficiency with respect to any such return has
been assessed or, to the knowledge of the Company, proposed which
might result in a Material Adverse Effect.
(xxx) The Company is not, will not become as a result of the
transactions contemplated hereby, and does not intend to conduct its
business in a manner that would cause it to become, an "investment
company" or a company "controlled" by an "investment company" within
the meaning of the Investment Company Act of 1940.
(xxxi) The Company and each of its affiliates, as that term is
defined in Section 517.021(l), Florida Statutes, has complied with all
provisions of Section 517.075, Florida Statutes, relating to doing
business with the Government of Cuba and certain other persons and
entities.
(xxxii) All employee benefit plans (as defined in Section 3(3) of
the Employee Retirement Income Security Act of 1974, as amended
("ERISA")) established, maintained or contributed to by the Company
comply with all material respects with the requirements of ERISA and
no employee pension benefit plan (as defined in Section 3(2) of ERISA)
has incurred or assumed an "accumulated funding deficiency" within the
meaning of Section 302 of ERISA or has incurred or assumed any
material liability (other than for the payment of premiums) to the
Pension Benefit Guaranty Corporation.
(xxxiii)The Shares have been duly included for trading, subject to
notice of issuance, on the Nasdaq National Market.
(xxxiv) Except where such failures to comply or violations would
not in the aggregate have a Material Adverse Effect on the Company,
(i) the Company has complied with the Immigration Reform and Control
Act of 1986 and all Regulations promulgated thereunder ("IRCA") with
respect to the completion and maintenance of Forms I-9, Employment
Eligibility Verification Forms, for all of its current employees and
reverification of the employment status of any and all employees whose
employment authorization documents indicated a limited period of
employment authorization; (ii) with respect to all former employees
who left the Company's employment within three years prior to the date
hereof, the Company has complied with IRCA with respect to the
maintenance of Forms I-9 for at least three years or for one year
beyond the date of termination, whichever is later; (iii) the Company
has had no immigration violations and has employed only individuals
authorized to work in the United States and has never been the subject
of any inspection or investigation relating to its compliance with or
violation of IRCA; and (iv) it has not been warned,
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fined or otherwise penalized by reason of any failure to comply with
IRCA, and no such proceeding is pending or threatened.
(xxxv) Except as disclosed in the Prospectuses, there are no
contracts, agreements or understanding between the Company and any
person that would give rise to a valid claim against the Company or
any U.S. Underwriter or International Manager for a brokerage
commission, finders' fee or other like payment in connection with the
Offering.
(xxxvi) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent
that might have a Material Adverse Effect.
(xxxvii) No action has been or, prior to the completion of the
distribution of the Shares, will be taken by the Company in any
jurisdiction outside the United States and Canada that would permit a
public offering of the Shares, or possession or distribution of the
International Prospectus or any amendment or supplement thereto, or
any International Preliminary Prospectus, or any other offering
material, in any country or jurisdiction where action for that purpose
is required.
2. PURCHASE AND SALE OF SHARES. Subject to the terms and conditions herein
set forth, the Company agrees to sell to each of the International Managers, and
each of the Intrenational Managers agrees, severally and not jointly, to
purchase from the Company, at a purchase price of $_____ per share, the number
of the Firm Shares set forth opposite the name of each International Manager on
SCHEDULE I.
The Company hereby grants to the International Managers the right to
purchase at their election in whole or in part up to an aggregate of 450,000
International Optional Shares at the purchase price per share set forth in the
paragraph above for the sole purpose of covering over-allotments in the sale of
International Firm Shares. Any such election to purchase Optional Shares may be
exercised by a written notice or notices delivered from time to time by Xxxxxxx
Xxxxx & Associates, Inc. to the Company, given within a period of 30 calendar
days after the date of this Agreement and setting forth the aggregate number of
Optional Shares to be purchased and the date on which such Optional Shares are
to be delivered. The International Optional Shares to be purchased by the
International Managers on any such date shall be in the same proportion to all
the Optional Shares to be purchased by the International Managers and the U.S.
Underwriters on such date as the International Firm Shares bear to all the Firm
Shares. Such International Optional Shares shall be purchased for the account of
each International Manager in the same proportion as the number of International
Firm Shares set forth opposite such International Manager's name bears to the
total number of International Firm Shares (with the resulting number to be
adjusted by Xxxxxxx Xxxxx & Associates, Inc. so as to eliminate fractional
shares). No Optional Shares shall be sold or delivered unless the International
Firm Shares and the U.S. Firm Shares previously have been, or simultaneously
are, sold and delivered.
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3. OFFERING BY THE INTERNATIONAL MANAGERS. Upon the authorization by the
International Managers of the release of the Shares, the several International
Managers propose to offer the Shares for sale upon the terms and conditions
disclosed in the International Prospectus.
4. DELIVERY OF SHARES; CLOSING. Certificates in definitive form for the
International Shares to be purchased by each International Manager hereunder,
and in such denominations and registered in such names as Xxxxxxx Xxxxx &
Associates, Inc. may request upon at least 48 hours prior notice to the Company,
shall be delivered by or on behalf of the Company to the International Managers
for the account of such International Managers, against payment by such
International Manager on its behalf as provided herein. Payment shall be made to
the Company in Federal (same day) funds by wire transfer to an account at a bank
acceptable to Xxxxxxx Xxxxx & Associates, Inc. The closing of the sale and
purchase of the International Shares shall be held at the offices of Xxxxxxx
Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000
(the "Representative's Office"), or at such location in Miami, Florida as
Xxxxxxx Xxxxx & Associates, Inc. may designate, except that any physical
delivery of certificates for the Shares shall be made at the direction of the
International Managers either at the Representative's Office or at the office of
Interwest Transfer Company, 1981 East 0000 Xxxxx, Xxxxx 000, Xxxx Xxxx Xxxx,
Xxxx 00000 (the "Interwest Office"), or shall be made to The Depository Trust
Company ("DTC"), 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, for the account of
the International Managers or for such other accounts as the International
Managers shall specify to DTC. The time and date of such delivery and payment
shall be, with respect to the Firm Shares, at 10:00 a.m., Eastern time, on
_______________, 1997 or at such other time and date as of the International
Managers and the Company may agree upon in writing, and, with respect to the
International Optional Shares, 10:00 a.m, Eastern time, on the date specified by
the International Managers in the written notice given by Xxxxxxx Xxxxx &
Associates, Inc. of the International Managers' election to purchase all or part
of such Optional Shares, or at such other time and date as the International
Managers and the Company may agree upon in writing. Such time and date for
delivery of the Firm Shares is herein called the "First Time of Delivery," and
such time and date for delivery of any Optional Shares, if not the First Time of
Delivery, is herein called a "Subsequent Time of Delivery," and each such time
and date for delivery is herein called a "Time of Delivery." The Company will
make certificates for the Shares available for checking and packaging at least
24 hours prior to each Time of Delivery at the Interwest Office or the office of
DTC in New York, New York or at such other location in New York, New York
specified by the International Managers in writing at least 48 hours prior to
such Time of Delivery.
For purposes of Rule 15c6-1 under the Securities Exchange Act of 1934, the
First Time of Delivery (if later than the otherwise applicable settlement date)
shall be the settlement date for payment of funds and delivery of securities for
all of the Shares sold pursuant to the Offering.
5. COVENANTS. The Company covenants and agrees with each of the
International Managers that:
(i) If the Registration Statement has been declared effective
prior to the execution and delivery of this Agreement, the Company will
file the Prospectuses with
13
the Commission pursuant to and in accordance with subparagraph (1) (or,
if applicable and if consented to by Xxxxxxx Xxxxx & Associates, Inc.,
subparagraph (4)) of Rule 424(b) not later than the earlier of (A) the
second business day following the execution and delivery of this
Agreement or (B) the fifth business day after the date on which the
Registration Statement is declared effective. The Company will advise
the International Managers promptly of any such filing pursuant to Rule
424(b).
(ii) The Company will not file with the Commission the
Prospectuses or the amendment referred to in the second sentence of
Section 1(a)(i) hereof, any amendment or supplement to the Prospectuses
or any amendment to the Registration Statement unless the International
Managers have received a reasonable period of time to review any such
proposed amendment or supplement and consented to the filing thereof,
such consent not be unreasonably delayed or withheld. The Company will
use its best efforts to cause any such amendment to the Registration
Statement to be declared effective as promptly as possible. Upon the
reasonable request of the International Managers or counsel for the
International Managers, the Company will promptly prepare and file with
the Commission, in accordance with the rules and regulations of the
Commission, any amendments to the Registration Statement or amendments
or supplements to the Prospectuses that may be necessary or advisable
in connection with the distribution of the Shares by the several
International Managers and will use its best efforts to cause any such
amendment to the Registration Statement to be declared effective as
promptly as possible. If required, the Company will file any amendment
or supplement to the Prospectuses with the Commission in the manner and
within the time period required by Rule 424(b) under the Act. The
Company will advise the International Managers, promptly after
receiving notice thereof, of the time when the Registration Statement
or any amendment thereto has been filed or declared effective or the
Prospectuses or any amendment or supplement thereto has been filed and
will provide evidence to the International Managers of each such filing
or effectiveness.
(iii) The Company will advise the International Managers promptly
after receiving notice or obtaining knowledge of (A) the issuance by
the Commission of any stop order suspending the effectiveness of the
Registration Statement or any part thereof or any order preventing or
suspending the use of any Preliminary Prospectus or Prospectus or any
amendment or supplement thereto, (B) the suspension of the
qualification of the Shares for offer or sale in any jurisdiction or of
the initiation or threatening of any proceeding for any such purpose,
or (C) any request made by the Commission or any securities authority
of any other jurisdiction for amending the Registration Statement, for
amending or supplementing a Prospectus or for additional information.
The Company will use its best efforts to prevent the issuance of any
such stop order and, if any such stop order is issued, to obtain the
withdrawal thereof as promptly as possible.
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(iv) If the delivery of a prospectus relating to the Shares is
required under the Act at any time prior to the expiration of nine
months after the date of the Prospectuses and if at such time any
events have occurred as a result of which the Prospectuses as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in light of the circumstances under which they were
made, not misleading, or if for any reason it is necessary during such
same period to amend or supplement the Prospectuses to comply with the
Act or the rules and regulations thereunder, the Company will promptly
notify the International Managers and upon their request (but at the
Company's expense) prepare and file with the Commission amendments or
supplements to the Prospectuses that correct such statement or omission
or effects such compliance and will furnish without charge to each
International Manager and to any dealer in securities as many copies of
such amended or supplemented Prospectuses as the International Managers
may from time to time reasonably request. If the delivery of a
prospectus relating to the Shares is required under the Act at any time
nine months or more after the date of the Prospectuses, upon request of
the International Managers but at the expense of the International
Managers, the Company will prepare and deliver to the International
Managers as many copies as the International Managers may request of
amended or supplemented Prospectuses complying with Section 10(a)(3) of
the Act. Neither the International Managers' consent to, nor the
International Managers' delivery of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
7.
(v) The Company promptly from time to time will take such action
as the International Managers may reasonably request to qualify the
Shares for offering and sale under the securities laws of such
jurisdictions as the International Managers may request and will
continue such qualification in effect for as long as may be necessary
to complete the distribution of the Shares, provided that in connection
therewith the Company shall not be required to qualify as a foreign
corporation or to file a general consent to service of process in any
jurisdiction.
(vi) The Company will promptly provide each Representative,
without charge, (A) two manually executed copies of the Registration
Statement as originally filed with the Commission and of each amendment
thereto, (B) for each other International Manager a conformed copy of
the Registration Statement as originally filed and of each amendment
thereto, without exhibits, and (C) so long as a prospectus relating to
the Shares is required to be delivered under the Act, as many copies of
each Preliminary Prospectus or the Prospectuses or any amendment or
supplement thereto as the International Managers may reasonably
request.
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(vii) As soon as practicable, but in any event not later than the
last day of the fifteenth month after the effective date of the
Registration Statement, the Company will make generally available to
its security holders an earnings statement of the Company covering a
period of at least 12 months beginning after the effective date of the
Registration Statement (which need not be audited) conforming with
Section 11(a) of the Act and Rule 158 thereunder.
(viii) During the period beginning from the date hereof and
continuing to and including the date 90 days after the date of the
Prospectuses, the Company will not, without the prior written consent
of Xxxxxxx Xxxxx & Associates, Inc., offer, pledge, issue, sell,
contract to sell, grant any option for the sale of, or otherwise
dispose of (or announce any offer, pledge, sale, grant of an option to
purchase or other disposition), directly or indirectly, any shares of
Common Stock or securities convertible into, exercisable or
exchangeable for, shares of Common Stock, except (a) as provided in
Sections 2 and 11 hereof and except for the issuance of Common Stock
upon the exercise of stock options or warrants outstanding on the date
of this Agreement to the extent that such stock options or warrants
were issued pursuant to plans or agreements which are disclosed in the
Prospectuses, (b) the grant of options to employees or directors under
existing stock option plans, (c) shares of Common Stock, securities
convertible into, exercisable or exchangeable for, or any other rights
to receive shares of Common Stock issued as full or partial
consideration for the acquisition of interests in business entities in
connection with the expansion of the Company's business, or (d) as
otherwise disclosed or contemplated by the Prospectus. Holders of
shares issued pursuant to item (c) of this subsection shall not be
granted the right to require registration of such shares and shall not
be permitted to sell such shares prior to the expiration of such 90-day
period.
(ix) During a period of five years from the effective date of the
Registration Statement, the Company will furnish to the International
Managers, without charge, (A) copies of all reports or other
communications (financial or other) furnished to shareholders
generally, (B) as soon as they are available, copies of any reports and
financial statements furnished to or filed with the Commission or the
National Association of Securities Dealers, Inc. or any national
securities exchange or quotation service upon which trading in shares
of the Common Stock is listed or reported, and (C) such additional
information concerning the business and financial condition of the
Company as the International Managers may reasonably request subject to
appropriate confidentiality provisions with respect to material
non-public information.
(x) The Company will not (A) take, directly or indirectly, prior
to the termination of the underwriting syndicate contemplated by this
Agreement, any action designed to cause or to result in, or that
reasonably be expected to constitute, the stabilization or manipulation
of the price of any security of the Company to facilitate
16
the sale or resale of any of the Shares, (B) sell, bid for, purchase or
pay anyone any compensation for soliciting purchases of, the Shares, or
(C) pay or agree to pay to any person any compensation for soliciting
another to purchase any other securities of the Company
(xi) The Company will apply the net proceeds from the offering in
the manner set forth under "Use of Proceeds" in the Prospectuses.
(xii) The Company will cause the Shares to be duly included for
trading on the Nasdaq National Market at each Time of Delivery and
maintain such status on the Nasdaq National Market or be listed on a
national securities exchange, on a continuous basis for at least three
years from the date hereof.
(xiii) If at any time during the period beginning on the date the
Registration Statement becomes effective and ending on the later of (A)
the date 25 days after such effective date (or if the International
Manager's option granted pursuant to Section 2 hereof has not been
exercised by such date, then 30 days after such effective date) or (B)
the date that is the earlier of (1) the date on which the Company first
files with the Commission a Quarterly Report on Form 10-Q after such
effective date and (2) the date on which the Company first issues a
quarterly financial report to shareholders after such effective date,
any rumor, publication or event relating to or affecting the Company
shall occur as a result of which in the reasonable opinion of Xxxxxxx
Xxxxx & Associates, Inc. the market price of the Common Stock has been
or is likely to be materially affected (regardless of whether such
rumor, publication or event necessitates an amendment of or supplement
to the Prospectus), the Company will, after written notice from Xxxxxxx
Xxxxx & Associates, Inc. advising the Company to the effect set forth
above, forthwith prepare, consult with the International Managers
concerning the substance of, and consult with Company counsel to
determine whether or not is advisable, under the circumstances, to
disseminate a press release or other public statement, reasonably
satisfactory to the International Managers, responding to or commenting
on such rumor, publication or event.
6. EXPENSES. The Company will pay all costs and expenses incident to the
performance of its obligations under this Agreement whether or not the
transactions contemplated hereby are consummated or this Agreement is terminated
pursuant to Section 10 hereof, including, without limitation, all costs and
expenses incident to (i) the fees, disbursements and expenses of the Company's
counsel and accountants in connection with the registration of the Shares under
the Act and all other expenses in connection with the preparation, printing and,
if applicable, filing of the Registration Statement (including all amendments
thereto), any Preliminary Prospectus or Prospectus and any amendments and
supplements thereto, and any blue sky memoranda; (ii) the delivery of copies of
the foregoing documents and this Agreement to the International Managers; (iii)
the filing fees of the Commission and the National Association of Securities
Dealers, Inc. relating to the Shares;
17
(iv) the preparation, issuance and delivery to the International Managers of any
certificates evidencing the Shares, including transfer agent's and registrar's
fees; (v) the qualification of the Shares for offering and sale under the
securities laws of jurisdictions outside the United States, including filing
fees and the reasonable fees and disbursements of counsel for the International
Managers relating thereto; (vi) any listing of the Shares on the Nasdaq National
Market and (vii) any expense for travel, lodging and meals incurred by the
Company and any of its officers, directors and employees in connection with any
meetings with prospective investors in the Shares. It is understood, however,
that, except as provided in this Section, Section 8 and Section 10 hereof, the
International Managers will pay all of their own costs and expenses, including
the fees of their counsel, stock transfer taxes on resale of any of the Shares
by them, and any advertising expenses relating to the offer and sale of the
Shares.
7. CONDITIONS OF THE INTERNATIONAL MANAGERS' OBLIGATIONS. The several
obligations of the International Managers hereunder to purchase and pay for the
Shares to be delivered at each Time of Delivery shall be subject, in their
discretion, to the accuracy of the representations and warranties of the Company
contained herein as of the date hereof and as of such Time of Delivery, to the
accuracy of the statements of Company officers made pursuant to the provisions
hereof, to the performance by the Company of its covenants and agreements
hereunder, and to the following additional conditions precedent:
(a) If the Registration Statement as amended to date has not become
effective prior to the execution of this Agreement, such Registration Statement
shall have been declared effective not later than 11:00 a.m., Eastern time, on
the date of this Agreement or such later date and/or time as shall have been
consented to by Xxxxxxx Xxxxx & Associates, Inc. in writing. If required, the
Prospectuses and any amendment or supplement thereto shall have been filed with
the Commission pursuant to Rule 424(b) within the applicable time period
prescribed for such filing and in accordance with Section 5(a) of this
Agreement; no stop order suspending the effectiveness of the Registration
Statement or any part thereof shall have been issued and no proceedings for that
purpose shall have been instituted, threatened or, to the knowledge of the
Company and the International Managers, contemplated by the Commission; and all
requests for additional information on the part of the Commission shall have
been complied with to the reasonable satisfaction of the International Managers.
(b) King & Spalding, counsel for the International Managers, shall have
furnished to the International Managers such opinion or opinions, dated such
Time of Delivery, with respect to the incorporation of the Company, the validity
of the Shares being delivered at such Time of Delivery, the Registration
Statement, the Prospectuses, and other related matters as the International
Managers may reasonably request which opinion the International Managers shall
use their best efforts to cause said firm to furnish, and the Company shall have
furnished to such counsel such documents as such counsel or the International
Managers request prior to such Time of Delivery for the purpose of enabling them
to pass upon such matters.
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(c) The International Managers shall have received an opinion, dated at
each Time of Delivery, of Greenberg, Traurig, Hoffman, Lipoff, Xxxxx & Xxxxxxx,
P.A., counsel to Company, to the effect specified in the U.S. Underwriting
Agreement.
(d) The International Managers shall have received from each of Xxxxx
Xxxxxxxx, LLP, KMPG Xxxxxx Xxxxx Denetim ve Yeminli Mali Musavirlik A.S., Xxxxx
Xxxxxxxx P.C. and Deloitte & Touche, letters dated the date hereof (or, if the
Registration Statement has been declared effective prior to the execution and
delivery of this Agreement, dated such effective date and the date of this
Agreement) and each Time of Delivery in form and substance satisfactory to the
International Managers, to the effect set forth in ANNEX I hereto. In the event
that the letters referred to in this Section 7(d) set forth any changes,
decreases or increases in the items specified in clause (vii) of Annex I, it
shall be a further condition to the obligations of the International Managers
that (i) such letters shall be accompanied by a written explanation by the
Company as to the significance thereof, unless the International Managers deem
such explanation unnecessary, and (ii) such changes, decreases or increases do
not, in the sole business judgment of the International Managers, make it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date of such letter.
(e) Since the date of the latest audited financial statements included
or incorporated by reference in the Prospectuses, the Company shall not have
sustained (i) any loss or interference with its business from fire, explosion,
flood, hurricane or other calamity, whether or not covered by insurance, or from
any labor dispute or court or governmental action, order or decree, otherwise
than as disclosed in or contemplated by the Prospectuses, or (ii) any change, or
any development involving a prospective change (including without limitation a
change in management or control of the Company), in or affecting the position
(financial or otherwise), results of operations, net worth or business prospects
of the Company, otherwise than as disclosed in or contemplated by the
Prospectuses, the effect of which, in either such case, is the sole business
judgment of the International Managers so material and adverse as to make it
impracticable or inadvisable to proceed with the purchase, sale and delivery of
the Shares being delivered at such Time of Delivery as contemplated by the
Registration Statement, as amended as of the date hereof.
(f) Subsequent to the date hereof there shall not have occurred any of
the following: (i) any suspension or limitation in trading securities generally
on the New York or American Stock Exchanges, or The Nasdaq National Market or
any setting of minimum prices for trading on such exchanges or Market or trading
in the Common Stock shall have been suspended by the Commission or the Nasdaq
Stock Market; (ii) a moratorium on commercial banking activities in new York or
Florida declared by either federal or state authorities; or (iii) any outbreak
or escalation of hostilities involving the United States, declaration by the
United States of a material emergency or war or any other national or
international calamity, emergency, crisis or change in political, financial or
economic condition or other material event, if the effect of any such event
specified in this clause (iii) in the sole business judgment of the
International Managers makes it impractical or inadvisable to proceed with the
purchase, sale and delivery of the Shares to be delivered at such Time
19
of Delivery as contemplated by the Registration Statement, as amended as of the
date hereof, and this Agreement.
(g) The Company shall have furnished to the International Managers at
such Time of Delivery certificates of officers of the Company, reasonably
satisfactory to the International Managers, as to the accuracy in all material
respects of the representations and warranties of the Company herein at and as
of such Time of Delivery, as to the performance by the Company of all of its
obligations hereunder to be performed at or prior to such Time of Delivery, and
as to such other matters as the International Managers may reasonably request,
and the Company shall have furnished or caused to be furnished certificates as
to the matters set forth in subsections (a) and (e) of this Section 7, and as to
such other matters as the International Managers may reasonably request.
(h) The Shares shall have been approved for trading upon notice of
issuance on The Nasdaq National Market.
(i) The Lockup Letters shall have been delivered to the International
Managers and the Company shall have noted the restrictions contained in such
Lockup Letters on the books and records of the Company relating to stock
transfers and on any certificates representing shares of Common Stock held by
such persons.
8. INDEMNIFICATION AND CONTRIBUTION.
(a) The Company agrees to indemnify and hold harmless each
International Manager against any losses, claims, damages or liabilities, joint
or several, to which such International Manager may become subject, under the
Act or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon: (i) any untrue
statement or alleged untrue statement made by the Company in Section 1(a) of
this Agreement; (ii) any untrue statement or alleged untrue statement of any
material fact contained in (A) the Registration Statement or any amendment
thereto, any Preliminary Prospectus or the Prospectuses or any amendment or
supplement thereto, or (B) any application or other document, or any amendment
or supplement thereto, executed by the Company or based upon written information
furnished by or on behalf of the Company filed in any jurisdiction in order to
qualify the Shares under the securities or blue sky laws thereof or filed with
the Commission or any securities association or securities exchange (each an
"Application"); or (iii) the omission or alleged omission to state in the
Registration Statement or any amendment thereto, any Preliminary Prospectus, the
Prospectuses or any amendment or supplement thereto, or any Application a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and will reimburse each International Manager for any
legal or other expenses reasonably incurred by such International Manager in
connection with investigating, defending against or appearing as a third-party
witness in connection with any such loss, claim, damage, liability or action;
PROVIDED, HOWEVER, that the Company shall not be liable in any such case to the
extent that any such loss, claim, damage, liability or action arises out of or
is based upon an untrue statement or alleged untrue statement or omission or
alleged omission made in the Registration Statement or any Amendment thereto,
any Preliminary Prospectus, the Prospectuses or any
20
amendment or supplement thereto or any Application in reliance upon and in
conformity with written information furnished to the Company by any
International Manager expressly for use therein. The obligation of the Company
to indemnify the International Managers (and any controlling person of each
International Manager) pursuant to this Agreement is subject to the condition
that, insofar as such losses, claims, damages, liabilities or expenses relate to
any such untrue statement, alleged untrue statement, omission or alleged
omission made in a Preliminary Prospectus that is corrected in the International
Prospectus, such indemnity agreement shall not inure to the benefit of any
International Manager from whom the person asserting such losses, liabilities,
claims, damages or expenses purchased the Shares in the Offering, if (i) such
International Manager failed to deliver a copy of the International Prospectus
to such person at or prior to the time delivery of the International Prospectus
is required by the Act, unless such failure was due to the failure by the
Company to provide copies of the International Prospectus to such International
Manager; and (ii) the delivery of such International Prospectus to such person
would have constituted a complete defense to the losses, claims, damages,
liabilities or expenses asserted by such person. The Company will not without
the prior written consent of each International Manager, settle or compromise or
consent to the entry of any judgment in any pending or threatened claim, action,
suit or proceeding (or related cause of action or portion thereof) in respect of
which indemnification may be sought hereunder (whether or not such International
Manager is a party to such claim, action, suit or proceeding), unless such
settlement, compromise or consent includes an unconditional release of such
International Manager from all liability arising out of such claim, action, suit
or proceeding (or related cause of action or portion thereof).
(b) Each International Manager, severally but not jointly, agrees to
indemnify and hold harmless the Company and its directors and officers who sign
the Registration Statement and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, against any
losses, claims, damages or liabilities to which the Company may become subject
under the Act or otherwise, insofar as such losses, claims, damages or
liabilities (or actions in respect thereof) arise out of or are based upon any
untrue statement or alleged untrue statement of any material fact contained in
the Registration Statement or any amendment thereto, any Preliminary Prospectus,
the International Prospectus or any amendment or supplement thereto, or any
Application or arise out of or are based upon the omission or alleged omission
to state therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, in each case to the extent, but only
to the extent, that such untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by such International Manager
expressly for use therein (it being understood that the only such information
furnished by any International Manager is contained in (i) the last paragraph on
the cover page of the International Preliminary Prospectus and the International
Prospectus concerning the terms of the International Offering, (ii) the
capitalized legends concerning passive market making and stabilizing
transactions on the inside front covers thereof; and (iii) the concession and
reallowance figures and the information relating to the Intersyndicate Agreement
in the seventh through ninth paragraphs appearing under the caption
"Underwriting" therein); and will reimburse the Company and its directors and
officers who sign the Registration Statement and any person who controls the
Company within the meaning of Section 15
21
of the Act or Section 20 of the Exchange Act, for any legal or other expenses
reasonably incurred by the Company and its directors and officers who sign the
Registration Statement and any person who controls the Company within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act, in
connection with investigating or defending any such loss, claim, damage,
liability or action.
(c) Promptly after receipt by an indemnified party under subsection (a)
or (b) above of notice of the commencement of any action, such indemnified party
shall, if a claim in respect thereof is to be made against the indemnifying
party under such subsection, notify the indemnifying party in writing of the
commencement thereof; but the omission so to notify the indemnifying party shall
not relieve if from any liability which it may have to any indemnified party
otherwise than under such subsection. In case any such action shall be brought
against any indemnified party and it shall notify the indemnifying party of the
commencement thereof, the indemnifying party shall be entitled to participate
therein and to the extent that it shall wish, jointly with any other
indemnifying party similarly notified, to assume the defense thereof, with
counsel satisfactory to the such indemnified party (who shall not, except with
the consent of the indemnified party, be counsel to the indemnifying party);
PROVIDED, HOWEVER, that if the defendants in any such action include both the
indemnified party and the indemnifying party and the indemnified party shall
have reasonably concluded based upon written advice of counsel that there may be
one or more legal defenses available to it or other indemnified parties which
are different from or additional to those available to the indemnifying party,
the indemnifying party shall not have the right to assume the defense of such
action on behalf of such indemnified party and such indemnified party shall have
the right to select separate counsel to defend such action on behalf of such
indemnified party, provided, further, however, that the Company shall be liable
for the fees and expenses of only one separate firm of attorneys (in addition to
local counsel) for all indemnified parties at any time in connection with any
action, suit or proceeding or in a series of separate but substantially similar
or related actions, suits or proceedings arising out of the same general
allegations and circumstances. After such notice from the indemnifying party to
such indemnified party of its election so to assume the defense thereof and
approval by such indemnified party of counsel appointed to defend such action,
the indemnifying party will not be liable to such indemnified party under this
Section 8 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof, unless (i) the indemnified party shall have employed
separate counsel in accordance with the proviso to the next preceding sentence
or (ii) the indemnifying party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party. Nothing in this
Section 8(d) shall preclude an indemnified party from participating at its own
expense in the defense of any such action so assumed by the indemnifying party.
(d) If the indemnification provided for in this Section 8 is
unavailable to or insufficient to hold harmless an indemnified party under
subsection (a) or (b) above in respect of any losses, claims, damages or
liabilities (or actions in respect thereof) referred to therein, then each
indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or liabilities (or
actions in respect thereof) in such proportion as is appropriate to reflect the
relative benefits received by the Company on the one hand and the International
Managers on the other from the offering of the Shares. If, however, the
allocation
22
provided by the immediately preceding sentence is not permitted by applicable
law, then each indemnifying party shall contribute to such amount paid or
payable by such indemnified party in such proportion as is appropriate to
reflect not only such relative benefits but also the relative fault of the
Company on the one hand and the International Managers on the other in
connection with the statements or omissions that resulted in such losses,
claims, damages or liabilities (or actions in respect thereof), as well as any
other relevant equitable considerations. The relative benefits received by the
Company on the one hand and the International Managers on the other shall be
deemed to be in the same proportion as the total net proceeds from the offering
(before deducting expenses) received by the Company bear to the total
underwriting discounts and commissions received by the International Managers.
The relative fault shall be determined by reference to, among other things,
whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or the International Managers on the
other and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company and
the International Managers agree that it would not be just and equitable if
contributions pursuant to this subsection (d) were determined by pro rata
allocation (even if the International Managers were treated as one entity for
such purpose) or by any other method of allocation which does not take account
of the equitable considerations referred to above in this subsection (d). The
amount paid or payable by an indemnified party as a result of the losses,
claims, damages or liabilities (or actions in respect thereof) referred to above
in this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions of this
subsection (d), (i) no International Manager shall be required to contribute any
amount in excess of the amount by which the total price at which the Shares
underwritten by it and distributed to the public were offered to the public
exceeds the amount of any damages which such International Manager has otherwise
been required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission and (ii) no person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Act) shall be
entitled to contribution from any person who was not guilty of such fraudulent
misrepresentation. The International Managers' obligations in this subsection
(d) to contribute are several in proportion to their respective underwriting
obligations and not joint.
(e) The obligations of the Company under this Section 8 shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
International Manager within the meaning of the Act; and the obligations of the
International Managers under this Section 8 shall be in addition to any
liability which the respective International Managers may otherwise have and
shall extend, upon the same terms and conditions, to each officer and director
of the Company and to each person, if any, who controls the Company within the
meaning of the Act.
9. DEFAULT OF INTERNATIONAL MANAGER.
(a) If any International Manager defaults in its obligation to purchase
Shares which is has agreed to purchase at a Time of Delivery, the other
International Managers, in their discretion,
23
may arrange for their purchase of, or for another party or other parties to
purchase, such Shares on the terms contained herein. If within thirty-six (36)
hours after such default by any International Manager the International Managers
do not arrange for the purchase of such Shares, the Company shall be entitled to
a further period of thirty-six hours within which to procure another party or
other parties satisfactory to the International Managers to purchase such Shares
on such terms. In the event that, within the respective prescribed periods, the
International Managers notify the Company that they have so arranged for the
purchase of such Shares, or the Company notifies the International Managers that
it has so arranged for the purchase of such Shares, the International Managers
or the Company shall have the right to postpone a Time of Delivery for a period
of not more than seven days in order to effect whatever changes may thereby be
made necessary in the Registration Statement or the Prospectus, or in any other
documents or arrangements, and the Company agrees to file promptly any
amendments to the Registration Statement or the Prospectuses that in the opinion
of the International Managers may thereby be made necessary. The cost of
preparing, printing and filing any such amendments shall be paid for by the
International Managers. The term "International Manager" as used in this
Agreement shall include any person substituted under this Section with like
effect as if such person had originally been a party to this Agreement with
respect to such Shares.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting International Manager or International Managers by the
International Managers and the Company as provided in subsection (a) above, the
aggregate number of such Shares which remains unpurchased does not exceed
one-eleventh of the aggregate number of Shares to be purchased at such Time of
Delivery, then the Company shall have the right to require each non-defaulting
International Manager to purchase the number of Shares which such International
Manager agreed to purchase hereunder at such Time of Delivery and, in addition,
to require each non-defaulting International Manager to purchase its pro rata
share (based on the number of Shares which such International Manager agreed to
purchase hereunder) of the Shares of such defaulting International Manager or
International Managers for which such arrangements have not been made, but
nothing herein shall relieve a defaulting International Manager from liability
for its default.
10. TERMINATION.
(a) This Agreement may be terminated with respect to the (i) the Firm
Shares or (ii) any Optional Shares, in the sole discretion of the International
Managers, by notice to the Company given prior to the First Time of Delivery or
any Subsequent Time of Delivery, respectively, in the event that (i) any
condition to the obligations of the International Managers set forth in Section
7 hereof has not been satisfied, or (ii) the Company shall have failed, refused
or been unable to deliver the Shares or to perform all obligations and satisfy
all conditions on its part to be performed or satisfied hereunder at or prior to
such Time of Delivery, in either case other than by reason of a default by any
of the International Managers. If this Agreement is terminated pursuant to this
Section 10(a), the Company will reimburse the International Managers severally
upon demand for all out-of-pocket expenses (including reasonable counsel fees
and disbursements) that shall have been reasonably incurred by them in
connection with the proposed purchase and sale of the Shares). The
24
Company shall not in any event be liable to any of the International Managers
for the loss of anticipated profits from the transactions covered by this
Agreement.
(b) If, after giving effect to any arrangements for the purchase of the
Shares of a defaulting International Manager by the International Managers and
the Company as provided in Section 9(a), the aggregate number of such Shares
which remains unpurchased exceeds one-eleventh of the aggregate number of Shares
to be purchased at such Time of Delivery, or if the Company shall not exercise
the right described in Section 9(b) to require non-defaulting International
Managers to purchase Shares of a defaulting International Managers or
International Managers, then this Agreement (or, with respect to a Subsequent
Time of Delivery, the obligations of the International Managers to purchase and
of the Company to sell the Optional Shares) shall thereupon terminate, without
liability on the part of any non-defaulting International Manager or the Company
except for the expenses to be borne by the Company and the International
Managers as provided in Section 6 hereof and the indemnity and contribution
agreements in Section 8 hereof; but nothing herein shall relieve a defaulting
International Manager from liability for its default.
11. SURVIVAL. The respective indemnities, agreements, representations,
warranties and other statements of the Company, its officers and the several
International Managers, as set forth in this Agreement or made by or on behalf
of them, respectively, pursuant to this Agreement, shall remain in full force
and effect, regardless of any investigation (or any statement as to the results
thereof) made by or on behalf of any International Manager or any controlling
person referred to in Section 8(f) or the Company or any officer or director or
controlling person of the Company referred to in Section 8(f), and shall survive
delivery of and payment for the Shares. The respective agreements, covenants,
indemnities and other statements set forth in Sections 6 and 8 hereof shall
remain in full force and effect, regardless of any termination or cancellation
of this Agreement.
12. NOTICES. All communications hereunder shall be in writing and, if sent
to any of the International Managers, shall be mailed, delivered by courier or
faxed and confirmed in writing to the International Managers in care of Xxxxxxx
Xxxxx & Associates, Inc., 000 Xxxxxxxx Xxxxxxx, Xx. Xxxxxxxxxx, Xxxxxxx 00000,
Attention: Xxxx X. Xxxx, Xx., with a copy to King & Spalding, 191 Peachtree
Street, Atlanta, Georgia, Attention Xxxxx X. Xxxxxxxxx, Esq.; and if sent to the
Company, shall be mailed, delivered by courier or faxed and confirmed in writing
to the Company at 0000 X.X. 00xx Xxxxxx, Xxxxx, Xxxxxxx 00000, with a copy to
Xxxxxxxxx, Traurig, Hoffman, , Xxxxxx, Xxxxx & Xxxxxxx, P.A. 0000 Xxxxxxxx
Xxxxxx, Xxxxx, Xxxxxxx 00000, Attention Xxxx Xxxxxxxxx, Esq. Notices sent by
mail shall be effective three days after mailing, but notices otherwise
transmitted shall be effective upon receipt.
13. ACTION BY THE INTERNATIONAL MANAGERS. Any action under this Agreement
taken by Xxxxxxx Xxxxx & Associates, Inc. will be binding upon the International
Managers.
14. BINDING EFFECT. This Agreement shall be binding upon, and insure solely
to the benefit of, the International Managers and the Company and to the extent
provided in Sections 8 and 10 hereof, the officers and directors and controlling
persons referred to therein and their respective
25
heirs, executors, administrators, successors and assigns, and no other person
shall acquire or have any right under or by virtue of this Agreement. No
purchaser of any of the Shares from any International Manager shall be deemed a
successor or assign by reason merely of such purchase.
15. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Florida without giving effect to the
choice of law principles of any jurisdiction.
16. COUNTERPARTS. This Agreement may be executed by any one or more of the
parties hereto in any number of counterparts, each of which shall be deemed to
be an original, but all such counterparts shall together constitute one and the
same instrument.
26
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us one of the counterparts hereof, and upon
the acceptance hereby by Xxxxxxx Xxxxx & Associates, Inc. on behalf of each of
the International Managers, this letter will constitute a binding agreement
among the International Managers and the Company. It is understood that your
acceptance of this letter on behalf of each of the International Managers is
pursuant to the authority set forth in the Master Agreement among International
Managers, a copy of which shall be submitted to the Company for examination,
upon request, but without warranty on the part of the International Managers as
to the authority of the signers thereof.
Very truly yours,
CHS ELECTRONICS, INC.
By: __________________________
Name:
Title:
The foregoing Agreement is hereby confirmed and
accepted as of the date first written above.
XXXXXXX XXXXX & ASSOCIATES, INC.
XXXXXXXXXX SECURITIES
X.X. XXXXXXXX & CO.
as Representatives of the several International Managers
By: Xxxxxxx Xxxxx & Associates, Inc.
By: ________________________________
Name:
Title:
27
ANNEX 1
Each comfort letter delivered pursuant to Section 7(d) shall contain statements
to the following effect:
(i) the accountants audited the financial statements included in the
registration statement;
(ii) the accountants are independent certified public accountants within the
meaning of the Securities Act of 1933 (the "Act");
(iii) the audited financials included in the registration statement comply as
to form in all material respects with the accounting requirements of the
Act and the rules and regulations thereunder;
(iv) a listing of the procedures followed for any statements that were not
audited, including interim financial statements (which should include at
a minimum the SAS 71 procedures, reading of the unaudited statements and
corporate minutes, and inquiries of company officials);
(v) for such unaudited statements, (a) a statement (or negative assurance) to
the effect that no modifications need be made for such financial
statements to conform to generally accepted accounting principles and (b)
the statement set forth in (iii) above;
(vi) the procedures followed for periods subsequent to the date of the latest
audited or unaudited financial statements included in the registration
statement (which should include at a minimum a reading of any unaudited
financials prepared by the entity for such subsequent periods, such as
monthly statements, if any, readings of corporate minutes and inquiries
of company officials);
(vii) for such subsequent periods, up until a date 5 or fewer days prior to the
date of the prospectus, a statement or negative assurance that there was
no change in capital stock, decrease in consolidated assets or increase
in debt or stockholders' equity; and
(viii) for financial statements of foreign entities, a statement that the
information presented complies with the requirements as to financial
statements for foreign businesses included in Regulation S-X.
28
SCHEDULE I
NO. OF
INTERNATIONAL MANAGER SHARES
--------------------- ------
Xxxxxxx Xxxxx & Associates, Inc........................
Xxxxxxxxxx Securities..................................
X.X. Xxxxxxxx & Co.....................................
Banco Santander Investments............................
Banque Paribas.........................................
BBV Latinvest Securities Inc...........................
Credit Suisse First Boston.............................
Nordbanken.............................................
Societe Generale.......................................
Total ........................................... 3,000,000
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